The inner workings of the electric grid

When you grow up living near two large power plants in Western Kentucky, it’s not hard to assume that those plants supply electricity to your home and community and without them the lights would go out. To some extent that is correct, but like most things the story is more complex. Who exactly controls our electrical grid and how they work to keep it safe, secure and reliable goes far beyond those two power plants just down the road.

Taking a look at the map, the electricity you use is supplied through a network of complex interconnections and balancing authorities all over the United States. The grid, like the one shown in the map, is actually the transmission grid. While not originally built to move bulk power nationwide, today the transmission grid has evolved to serve in that role. What most people see in their neighborhoods, the lines and poles, is actually the distribution grid. This grid takes the power from the transmission grid, transforms it into power that is safe and usable, and then transports it to all customers in a utility’s territory. The two grids work together to provide electricity to customers.

Kentucky is a part of the Eastern Interconnection, which is one of three major electrical grids in the United States. Beyond that, there are entities called balancing authorities at work within this electricity superhighway. The Energy Information Administration defines a balancing authority as “the responsible entity that integrates resource plans ahead of time, maintains load-interchange-generation balance within a Balancing Authority Area, and supports Interconnection frequency in real time.” That’s a complicated way of saying that these balancing authorities are responsible for ensuring that the electrical grid remains secure, safe, stable and reliable. They are overseen by the North American Electric Reliability Corporation (NERC) which develops standards that are further overseen by the Federal Energy Regulatory Commission (FERC).

But why exactly would an electrical grid need balancing to begin with and what does that have to do with reliability? The Eastern Interconnection is like a giant clock, open it up and you see a bunch of gears, all different sizes, connected together and turning in perfect synchronization. The interconnection houses many generators, of various sizes and types that are connected, pulling and pushing on one another, and rotating in perfect synch to keep the amount of electricity generated equal to the amount of electricity being consumed.

This synching of generation and demand for electricity within the interconnection is handled by balancing authorities. But how do they know when things are in synch and balanced?

This push and pull of the flow of electricity along the grid is called frequency. Think of it like the heart beat of the human body. If the generation of the electricity exceeds demand, frequency increases and if demand increases beyond supply of electricity, the frequency decreases. Just like in our bodies, there is an optimum frequency of the grid that signals it as healthy and working properly. Each balancing authority monitors and meters this frequency to ensure optimal performance.

Looking to Kentucky, there are several balancing authorities working together, all dispatching the generation units in their territory to provide just the right amount of electricity for their consumers and others in the Eastern Interconnection. However, each balancing authority is also conntected via transmission lines to their neighboring balancing authorities. This provides extra strength and stability to the electrical grid by safeguarding that in an emergency or unforeseen event, each balancing authority can import or export as necessary to their neighbors. This ensures that everyone has power when they need it. Without this tie-in, each balancing authority would have to build its own standby or emergency generation units. By sharing this need with others, the efficincy of the entire Eastern Interconnection is improved. Initially, this was the only reason to interconnect to a neighboring grid.

Today, however, utilities may also be transferring power based on the economics of the electricity, meaning that utilities can choose to buy and sell electricity with their neighboring utilities or those that join a sort of supermarket club. These are officially called Regional Transmission Organizations (RTOs). In addition to facilitating these market transactions, RTOs also serve as balancing authorities for those utilities who belong to them. In Kentucky, there are two of these RTOs operating (PJM and MISO) where utilities may choose to join with approval by the Kentucky Public Service Commission. Once in, a utility can shop for power, which means the power to your home may come from a neighboring utility if the price is right. Conversely, a power plant in Kentucky may find a buyer in another state or region that could keep it running even if there isn’t the demand for that power in Kentucky.

With two interests at play in the interconnection (price and reliability), who manages these interests and ensures a healthy grid for both utilities and consumers? The good news is that there are mandatory and enforceable reliability standards. These standards in North America are developed by NERC and approved by FERC, who has jurisdiction over the bulk electric system. Regional Reliability Coordinators oversee the balancing authorities and ensure that everyone is performing up to standards. As far as the market is concerned, FERC also approves the RTO operations. Thus, the real skill for the utility becomes working in perfect harmony in this complex system to provide reliable power, at the lowest price, all the while keeping us, the customer happy.